Spain's Ibex 35, the benchmark index that tracks the country's 35 most heavily traded listed companies, closed higher on Monday. The index opened August with a 0.68% gain, moving closer to record highs, even though it trailed the sharper advances posted on other major European exchanges. The rally was fuelled in part by hopeful comments from US President Donald Trump about a possible resolution to the conflict in the Middle East, though investors treated the remarks with caution given past statements from Trump that failed to translate into a breakthrough.
Indra and Steel Stocks Lead Gains
Indra, the Spanish defence, aerospace and technology group known for its work in areas such as air traffic control and airport electronics, in which the state holds a significant stake, rose more than 3%, making it the index's strongest performer. Steelmakers Acerinox, the Spanish stainless steel producer, and ArcelorMittal, the Luxembourg-based steel giant, each gained between 2% and 3%. Both were lifted by optimism over favourable third-quarter corporate forecasts and by the growing effectiveness of the European Union's Carbon Border Adjustment Mechanism, known as CBAM, a levy designed to tax carbon-intensive imports and shield European industry from cheaper, more polluting competitors abroad, together with tariff barriers protecting the sector in Europe.
Renewables and Property Stocks Slide
At the bottom of the index, renewable energy stocks bore the brunt of selling. Solaria, the Spanish solar power developer, fell just over 2%, though it managed to pare back steeper losses recorded earlier in the day. Gloom in the sector has persisted since Acciona Energía, the renewable arm of the Spanish infrastructure group Acciona, reported weak first-half results last week. That has been compounded by a summer glut of clean power generation during hours of lower demand, which continues to erode average sale prices.
Merlin Properties, one of Spain's largest real estate investment trusts, was hit by a cut to its price target. Repsol, Spain's largest oil and gas company, also lost ground, dragged down by falling crude oil prices.
Rest of Europe Outpaces Madrid
Buying was far stronger elsewhere on the continent, where benchmark indices such as Germany's DAX and France's CAC 40, the leading gauges in Europe's two largest economies, both gained close to 1.5%. Among continental blue-chips, French carmaker Renault stood out, boosted by strong new car registration figures in the French market in July.
Wall Street Awaits SpaceX Results
Wall Street also traded firmly higher, with the Nasdaq 100, which tracks the 100 largest non-financial companies listed on the Nasdaq exchange, climbing more than 1% after an intense week of corporate earnings. Attention now turns to the first results from SpaceX, the rocket and satellite launch company founded by Elon Musk that recently began trading on public markets, due this Tuesday. The event, despite the company's limited weight in the tech index, could still have a notable knock-on effect on market sentiment.
Meta, the parent company of Facebook and Instagram, extended its rebound following heavy selling last week. Investors are increasingly weighing that, even with the short-term hit to margins from high capital spending and depreciation, the integration of artificial intelligence is already transforming advertising performance and the user experience on its platforms.
Oil Falls Nearly 5%
In commodities, precious metals and energy both traded lower, with oil the hardest hit. Brent crude, the global benchmark for oil prices, shed almost 5%, though it held above $80 a barrel. The pullback reflected investors discounting the geopolitical risk premium after Trump's comments, and taking profits following recent gains. Volatility in the oil market is likely to remain elevated given continued instability in the Middle East and ongoing shifts in diplomatic negotiations.
